Contracts Cut||ne

Steps of a Contract
I|rst 8east
Iormat|on
Damages Lxpectat|on Damages
Amount |f both part|es fu||y performed
8||atera| Contract
Cffers that requ|re a return prom|se contract resu|ts upon the
g|v|ng of a prom|se by the offeree |n return for a prom|se by the
offeror
At the moment of creat|on both part|es have unperformed
prom|ses
Mutua| Assent + Cons|derat|on
Mutua| Assent
Wou|d a reasonab|e person |n the pos|t|on of the part|es be||eve
that mutua| assent ex|sts?
Mutua| Assent by both part|es on agreed upon terms
Cb[ect|ve test performed to determ|ne |f there has been
mutua| assent
WhaL a reasonable person ln Lhe poslLlon of Lhe
parLles would Lhlnk lL Lo mean
Cffer
A man|festat|on of w||||ngness to enter |nto a barga|n so
made as to [ust|fy another person |n understand|ng that h|s
assent to that barga|n |s |nv|ted and w||| conc|ude |t
Was a promlse ln facL made and was lL sufflclenLly
deflnlLe Lo deflne Lhe rlghLs and obllgaLlons of Lhe
parLles?
uld Lhe promlsor have Lhe necessary lnLenL Lo be
legally bound?
uld Lhe promlsee assenL Lo Lhe creaLlon of proposed
rlghLs and obllgaLlons
lf Lhere was reference Lo a Lerm LhaL ls wldely used ln
ln common pracLlce and usage and Lhe parLy has
reason Lo assume lL wlll be parL of Lhe conLracL Lhen lL
lL wlll be lmplledly parL of Lhe conLracL
When there are conf||ct|ng parts of a contract the part that
better exp|a|ns the ma|n thrust of the agreement supersedes
supersedes the conf||ct|ng part
A|so the ob[ect|ve test (what a reasonab|e person wou|d
be||eve the offer to be) |s used to determ|ne what an offer |s
If the proposa| |s addressed to a number of part|es the
commun|cat|on |s not an offer because the buyer shou|d
know that the se||er does not |ntend to transfer a|| of the
power to f|n|sh the contract (MUS1 be conveyed to the party
party that the offer |s a mass so||c|tat|on rather than a
spec|f|ed offer otherw|se |t w||| be cons|dered an offer)
Advert|sements typ|ca||y NC1 an offer but rather
so||c|tat|on for an offer
Seller cannoL be expecLed Lo sell or buy poLenLlally
unllmlLed quanLlLles or be bound Lo all who mlghL see
see or hear Lhe add
8Al1 SWl1CP lf an adverLlsemenL has been
deLermlned Lo be a balL and swlLch ad Lhen lL wlll be
consLrued as an offer
UCC I|rm Cffer
MusL be made by a merchanL
MusL be ln a slgned wrlLlng
MusL glve assurance Lo Lhe offeree LhaL Lhe offer wlll
be open
1he offeror musL slgn Lhe offer
lf all of Lhese condlLlons are meL lL funcLlons as a
opLlon k even Lhough Lhere ls no conslderaLlon
LlmlLs Lhe perlod of lrrevocablllLy Lo Lhree monLhs
Cons|derat|on
A return prom|se or performance
8arga|ned for
SoughL by Lhe promlsor ln exchange for hls promlse
Clven by Lhe promlsee
It must be |n detr|ment to the prom|see Ck benef|t to the
prom|sor
ast cons|derat|on |s no cons|derat|on
If the prom|see was go|ng to perform the act|on anyway
then |t |s not cons|derat|on 1he agreement must be a factor
|n |nduc|ng the person to comm|t the act|on
Inadequate cons|derat|on |s perm|tted as |ong as |t |s not
overt|y try|ng to get around the ru|e of cons|derat|on
Powever conslderaLlon creaLed slmply Lo geL around
around Lhe conslderaLlon rule (le $100 for $10000)
$10000) wlll noL be allowed
Se|f sat|sfact|on |s NC1 cons|derat|on
Cond|t|ona| G|ft |s NC1 the same as cons|derat|on
ConslderaLlon asks for a reLurn promlse/performance
promlse/performance LhaL Lhe granLor ls seeklng
CondlLlonal ClfL has Lhe granLor glvlng someLhlng
away and Lhe efforL on behalf of Lhe granLee ls only
such LhaL lLs ln an efforL Lo recelve Lhe beneflL raLher
Lhan an acLlon Lhe granLor ls speclflcally seeklng
Lxample Company glvlng away money Lo former
employees as long as Lhey plcked up Lhelr check ln Lhe
Lhe offlce unless employees can show LhaL Lhelr Lravel
Lravel was soughL by Lhe company for some maLerlal
beneflL Lhls ls nC1 conslderaLlon
Caut|onary funct|on
Channe||ng funct|on
Lv|dent|ary funct|on
Acceptance
Acceptance |s a man|festat|on of an |ntent to enter |nto the
agreement on the spec|f|c terms and manner |n wh|ch
acceptance |s a||owed to be created by the offeror
Acceptance norma||y occurs when |t |s commun|cated to the
the offer|ng party
Mallbox 8ule lf a parLy places a leLLer communlcaLlng
communlcaLlng accepLance ln Lhe mall Lhe accepLance
accepLance occurs when he offlclally puLs Lhe leLLer ln
ln Lhe mallbox noL when Lhe leLLer offlclally reaches
Lhe offeror 1hls puLs Lhe rlsk on Lhe offeror who can
can requlre acLual recelpL as a condlLlon of accepLance
accepLance
Acceptance can occur through a return prom|se
S||ence does not const|tute acceptance
Acceptance must conform to the terms of the offer
AnyLhlng alLered wlll be LreaLed as a re[ecLlon and
counLeroffer
Counteroffer
ua||f|ed Acceptance reports back to an offer w|th a yes
but w|th new terms
Amounts to a re[ect|on and a counter offer
Acceptance pr|or to the term|nat|on of the power to accept
1h|ngs that can cause a term|nat|on |n the power to accept
kevocotion
kejection
Lopse of 1ime
ueoth of the Porty
Un||atera| Contract
Cffer
Cffer w||| on|y construe comp|ete performance as
acceptance
Acceptance
1here |s no |mp||ed acceptance on|y actua| comp|et|on w|||
suff|ce
Cnce there |s an acceptance by the offeree (through
performance) the ob||gat|on then fa||s to the offeror to fu|f|||
fu|f||| the prom|se for performance
nCWLVLk |f the offeror |s unaware of the offeree's
act|v|t|es the render|ng of past performance wou|d not
create a contract because the offeree fa||ed to commun|cate
(offeree wou|d st||| be protected by rest|tut|on damages)
Acceptance pr|or to the term|nat|on of the power to accept
kevocat|on
now Lhe offeror ls bound Lo Lhe conLracL as soon as
Lhe offeree has rendered a subsLanLlal parL of Lhe
requesLed performance
lL As long as performance has begun where lL ls noL
noL Lrlvlal or plannlng lL ls lrrevocable
ke[ect|on
Lapse |n t|me
Death of Cfferor
Irrevocab|e except|ons
When an offer lnvlLes an offeree Lo accepL by
renderlng a performance and does noL lnvlLe
promlssory accepLance one musL begln Lhe
performance Lender Lhe performance or begln Lo
Lender Lhe performance ln order Lo make Lhe offer
lrrevocable
lf lL ls wrlLLen expressly lnLo Lhe conLracL LhaL Lhe offer
offer ls lrrevocable LhaL doesn'L necessarlly work
because lL ls a graLulLous promlse and Lherefore
unenforceable
Cpt|on Contract 1hls ls a way Lo make an
offer lrrevocable vla Lhe conLracL 1he offeree
musL provlde conslderaLlon for Lhe opLlon" of
of Lhe offer Lo sLay open (lrrevocable)
1hls acLually bases Lhe lrrevocablllLy noL on
conslderaLlon buL raLher on rellance whlch can
can blnd Lhe parLles
lf Lhe offeree reasonably relles on an offer Lo hls
deLrlmenL Lhen Lhe offer ls lrrevocable
ConLracLorSubconLracLor LxcepLlon
A conLracLor cannoL accepL a bld ln full before
before he knows lf he has Lhe [ob because he
would Lhen be on Lhe hook for performance
LhaL wasn'L needed lf he dldn'L geL Lhe [ob
lf an offer ls made and Lhe offeree relles upon
upon Lhe offer Lo hls deLrlmenL buL Lhe offer
was made ln mlsLake lL can only be revocable lf
lf Lhe offeror's mlsLake was known or should
have been known
8aslcally lf Lhe offer was made Lo Lhe
conLracLor and Lhe conLracLor used lL ln hls
blds Lhen Lhe conLracLor can clalm promlssory
promlssory esLoppel so as Lo prevenL Lhe
offeror from revoklng Lhe offer
Irrevocab|e Lxcept|ons
kestatement 87
kare|y works a|most never works
kestatement
L|m|t |t through opt|on contracts
Un||atera| Contracts w|th started performance
Sa|e of goods w|th cons|derat|on (UCC)
kestatement 220S
A f|rm offer to buy a sa|e of goods w|th |n a s|gned wr|tten
document
Interpretat|on]Construct|on
8att|e of the Iorms
Dea|s w|th two soph|st|cated part|es
Created because contracts are not created facetoface anymore
D|ckert 1erms terms that the part|es actua||y barga|n over
8o||er |ate terms
M|rror Image ku|e An offer must be accepted exact|y as |t was
offered w|thout any mod|f|cat|ons
Last Shot ku|e A party |mp||ed|y assented to and thereby
accepted a counteroffer by conduct |nd|cat|ng a |ack of ob[ect|on to
to |t
UCC ku|es
App||es to the sa|e of goods
If the sa|e |f for goods and serv|ces then |f the sa|e of goods |s
predom|nant or the ma|n part of the sa|e then the UCC w||| app|y
UCC 2207
(1) A def|n|te and seasonab|e express|on of acceptance or a wr|tten
wr|tten conformat|on wh|ch |s sent w|th|n a reasonab|e t|me
operates as an acceptance even though |t states terms add|t|ona| or
or d|fferent to those offered or agreed upon un|ess acceptance |s
express|y made cond|t|ona| on assent to the add|t|ona| or d|fferent
terms (to wh|ch |t wou|d be a counter offer)
ke[ects the M|rror Image ku|e and |nstead states that as
|ong as the add|t|ona| or d|fferent terms don't a|ter mater|a|
terms then |t w||| be accepted
(2) 1he add|t|ona| terms are to be construed as proposa|s for
add|t|on to the contract
8etween Merchants (8C1n must be merchants) such terms
terms become port of the controct un/ess
1he offer expressly llmlLs accepLance Lo Lhe Lerms of
of Lhe offer
lf Lhls ls Lhe case any addlLlonal proposals
CAnnC1 become parL of Lhe conLracL unless
acknowledged by boLh parLles
1hey maLerlally alLer Lhe offer (|f |t's a mater|a| term)
term)
noLlflcaLlon of ob[ecLlon Lo Lhe proposed alLeraLlons
has already been glven or ls glven wlLhln a reasonable
reasonable Llme afLer noLlce of Lhem ls recelved
*If the proposa|s are ADDI1ICNAL 1LkMS you must have the
the other party acknow|edge the change and assent to the
c|ause anyway (|f you add someth|ng that |s s||ent on the
matter |n the or|g|na| contract then |t |s an ADDI1ICNAL
term)
If the proposa|s are d|fferent terms then you must have the
the other party acknow|edge the change and assent to the
contract anyway
If you knock out the add|t|ona| terms because no assent was
was reach|ng |t reverts back to the or|g|na| contract wh|ch
benef|ts ne|ther party
If you knock out a d|fferent term then the party who
or|g|na||y created the contract has an undue advantage
1herefore courLs wlll normally sLrlke down Lhe
dlfferenL Lerms and use Lhe defaulL rule (uCC flllers) Lo
Lo supplanL Lhe dlspuLed Lerm
(3) Conduct by both part|es wh|ch recogn|zes the ex|stence of a
contract |s suff|c|ent to estab||sh a contract for sa|e a|though the
wr|t|ngs of the part|es do not otherw|se estab||sh a contract In such
such case the terms of a part|cu|ar contract cons|sts of the terms
that the wr|t|ngs of both part|es agreed upon and f|||s the rest |n
w|th defau|t UCC standards (re[ects much of the |ast shot ru|e)
Interpretat|on
Sub[ect|ve |nterpretat|on What part|es thought from the
If there |s NC d|sagreement to the mean|ng of |anguage the court
w||| use the sub[ect|ve test
Cb[ect|ve What a reasonab|e person wou|d be||eve
In |nterpret|ng a contract you use a mod|f|ed ob[ect|ve test |e the
|nterpretat|on that a reasonab|e person wou|d be||eve |n the
c|rcumstances
In |nterpret|ng the contract the court w||| go
Language Course of erformance Course of Dea||ngs 1rade
Course of erformance If performance has been accepted
or|g|na||y then |t can be assumed that that was the performance
requested
Course of Dea||ngs A context where dur|ng the dea||ngs have
d|samb|guated certa|n terms (norma||y on|y used to prov|de
descr|pt|on for AM8IGUCUS terms)
1rade Usages Common mean|ngs for terms |n a part|cu|ar
|ndustry
Must ask |f both part|es are tru|y part of that |ndustry and |f
|f so have they been a part of |t |ong enough that they
shou|d have know the term
If one party knows or has reason to know what the other party
certa|n |anguage and the other party does not know or have reason
know the mean|ng attached to the d|sputed |anguage the court w|||
enforce the contract |n accordance w|th the |nnocent party's mean|ng
ku|e of Construct|on A contract w||| be read aga|nst the drafter
because the drafter chose the words |n the contract and |s more
protect h|s own |nterests |n the other party's |nterest
If a term can be used |n a broader sense and a more narrow sense |t
becomes the burden of the p|a|nt|ff to prove that the term was
and understood |n the more narrow sense or e|se |t w||| be construed
the broader sense
A party's |ntent |s s|gn|f|cant |f the |anguage |n quest|on d|d co|nc|de
w|th a d|ct|onary mean|ng of the word thus g|v|ng we|ght to the |dea
|t wou|d ob[ect|ve|y cons|dered app||cab|e |n the dea|
r|nc|p|es of Interpretat|on
Mnemon|c dev|ce favored terms not VLky Los|ded
Va||d Lffect|ve keasonab|e Lega| (cons|stent) w|th art|es
art|es purpose ub||c po||cy
Nosc|tur a soc||s
1he mean|ng of a word |n a ser|es |s affected by the other |n
|n the same ser|es or may be affected by |ts |mmed|ate
context
A term |s techn|ca||y amb|guous out of context but |s c|ear
by the ser|es of words around |t
L[usdem gener|s
A genera| term [o|ned w|th a spec|f|c term w||| be deemed to
to |nc|ude on|y th|ngs that are ||ke the spec|f|c term (same
genus)
1here |s a genera| term and that term has been narrowed by
by more spec|f|c examp|es
Lxpresso un|us exc|us|o a|ter|us
If one or more spec|f|c terms are ||sted w|thout any more
genera| or |nc|us|ve terms other |tems a|though s|m||ar |n
k|nd are not |nc|uded
Ut mag|s va|eat quam pereat
8y th|s max|m an |nterpretat|on that makes the contract
va||d w||| be preferred to the |nterpretat|on that makes the
contract |nva||d
Interpretat|on v|ew try|ng to go w|th the part|es |ntent and
and the |ntent of part|es |s a|most a|ways for a contract to be
be va||d
Construct|on v|ew 1he court prefers to make a contract |n
|n ||ne w|th the |aw regard|ess of the overa|| |ntent of the
part|es
Cm|na praesumuntur contra pr|ferentem
Interpret aga|nst the drafter
Interpret the contract as a who|e
Don't abort one spec|f|c phrase and focus on |t but rather
|nterpret the |anguage as |t works |n the context of the
contract
"urpose of the part|es"
1he pr|nc|p|e apparent purpose of the part|es |s g|ven great
great we|ght |n determ|n|ng the mean|ng to be g|ven
man|festat|ons of |ntent|on or to any part thereof
nowever |f the purpose of the part|es |s obscure the court
may fa|| back on the "p|a|n mean|ng"
Spec|f|c prov|s|on |s except|on to a genera| one
A spec|f|c prov|s|on negat|ng part of a genera| prov|s|on w|||
w||| be g|ven supersed|ng power
nandwr|tten or typed prov|s|ons contro| (are preferred) to pr|nted
pr|nted prov|s|ons
ub||c |nterest |nterpretat|ons are preferred
keasonab|e Lxpectat|ons
Concerned w|th contracts that has one soph|st|cated party and one
one unsoph|st|cated party
Contracts of Adhes|on It's formed on a take |t or |eave |t bas|s and
and |s norma||y drafted by the super|or party Cne party has no
opportun|ty to change terms thereby NC1 revea||ng the|r true
preferences
Must be a form contract
Must be on a "take |t or |eave |t" bas|s
Drafted by a super|or party
Cn|y when Contracts of Adhes|on are used to we app|y the Doctr|ne
Doctr|ne of keasonab|e Lxpectat|ons
Doctr|ne of keasonab|e Lxpectat|ons 1he ob[ect|ve|y reasonab|e
expectat|ons of the app||cants and |ntended benef|c|ar|es regard|ng
regard|ng the terms of a contract w||| be honored even |f
pa|nstak|ng study of po||cy prov|s|ons wou|d have negated those
expectat|ons
In other words |f one were to enter |nto a contract and has
a reasonab|e expectat|on of a serv|ce prov|ded and |t |sn't
prom|nent|y d|sp|ayed or exp|a|ned to the customer that
those expectat|ons are fa|se the court w||| often a||ow the
customer's expectat|on
Cn|y w|th Contracts of Adhes|on and Doctr|ne of keasonab|e
Lxpectat|ons II there are |ncons|stenc|es between the bo||erp|ate
|anguage and reasonab|e expectat|ons
(D|ckered Language Course of erformance Course of
Dea||ngs 1rade Usage |e reasonab|e expectat|ons)
8o||erp|ate |anguage
aro| Lv|dence ku|e
Not [ust for ora| ev|dence but rather AN ev|dence
If the contract |s sub[ect to the statute of frauds the paro| ev|dence
ev|dence dea||ng w|th mater|a| terms must be |n wr|t|ng
the estoppe| except|on can st||| app|y
2 types of Lks
Lk for fu||y |ntegrated contracts
Lk for art|a||y |ntegrated contracts
Lv|dence |s not adm|ss|b|e or |nadm|ss|b|e |n an abstract manner
but rather contextua||y A p|ece of ev|dence can be adm|ss|b|e for
one purpose but |nadm|ss|b|e for another purpose
aro| Lv|dence ku|e When you have a wr|tten contract ev|dence
from outs|de the "four corners" of the document |s not adm|ss|b|e
to vary the terms of the contract or to supp|ement the contract 1he
1he ev|dence IS adm|ss|b|e for every other purpose
Comp|ete|y Integrated Contracts If the contract |s comp|ete|y
|ntegrated (that |s conta|ns such |anguage as |mports a comp|ete
|ega| ob||gat|on) then paro| ev|dence |s |nadm|ss|b|e to vary terms
of a contract or to add]supp|ement terms of the contract
A contract |s comp|ete|y |ntegrated when |t |s f|na| and
comp|ete
llnal fully formed
CompleLe lf all Lhe Lerms of Lhe conLracL are
conLalned ln Lhe conLracL
art|a||y |ntegrated Contract If a contract |s f|na| but not
comp|ete you are NC1 a||owed to use paro| ev|dence to vary the
terms that have been agreed upon but because |t |s not comp|ete
you can use paro| ev|dence to add to the contract
arts of the ent|re proceed|ngs are not conta|ned |n the
contract
now to te|| |f a contract |s comp|ete
Depends on the |ntent of the part|es
In many cases |t w||| h|nge on |nterpretat|on
Merger c|ause prov|s|ons at the end of contracts that state
state "th|s |s the f|na| and comp|ete agreement" (|sn't a|ways
a|ways effect|ve)
1wo ways to determ|ne |f a term |s amb|guous or not
Iour corners approach Iust |ook at what |s conta|ned |n
the spec|f|c deed through p|a|n |anguage
lf you can lnfer Lhe lnLenL of Lhe parLles Lhen even lf
Lhe parLles argue a dlfferenL lnLenL Lhen Lhe courL wlll
wlll use Lhe lnferred lnLenL
lf you can declpher a legal obllgaLlon Lhen Lhe four
corners approach ls a success
use an ob[ecLlve approach when uslng Lhe four
corners LesL
Contextua| Approach Iudge f|rst |ooks at a|| extr|ns|c
ev|dence to see |f the contract d|sp|ays the part|es fu|| |ntent
|ntent or |f some |anguage |s kLASCNA8L suscept|b|e to
d|fferent |nterpretat|on then uses the Lk ru|e to exc|ude
any ev|dence that adds or var|es the terms of the contract
UCC Approach
As |ong as |t doesn't comp|ete|y change]negate |anguage |n
the contract paro| ev|dence can supp|ement vary or even
contrad|ct terms |n the contract
erformances usages and pr|or dea||ngs are |mportant
enough to be adm|tted a|ways even for a f|na| and comp|ete
comp|ete agreement on|y |f they cannot be reasonab|y
reconc||ed w|th the express terms of the contract are they
not b|nd|ng to the part|es
8as|ca||y un|ess |t comp|ete|y changes the terms of the
contract paro| ev|dence |s accepted |n UCC transact|ons
Construct|on
Ident|f|es the |ega| effect of the two part|es enter|ng |nto the k
1he |aws |mp|y|ng ob||gat|ons |n |aw that are not |n the k
erformance]8reach
Good Ia|th Ia|r Dea||ng
Ar|ses |n every contract no matter |f the part|es agree to |t or not
(pr|nc|p|e of construct|on)
Duty of good fa|th and fa|r dea||ng ar|ses CNCL CU LN1Lk IN1C A
A CCN1kAC1 WI1n ANC1nLk Ak1
If |t passes the "na na" test
8ad fa|th
Se||er concea||ng a defect |n what you are se|||ng
8u||der w|||fu||y fa|||ng to perform |n fu|| though otherw|se
otherw|se substant|a||y perform|ng
Contractor open|y abus|ng barga|n|ng power to coerce an
|ncrease |n contract pr|ce
n|r|ng a broker and then de||berate|y prevent|ng h|m from
consummat|ng the dea|
Consc|ous |ack of d|||gence |n m|t|gat|ng the other party's
damages
Arb|trar||y and capr|c|ous|y exerc|s|ng a power to term|nate
term|nate a contract
Adopt|ng an overreach|ng |nterpretat|on of contract
|anguage
narass|ng the other party for repeated assurances of
performance
Good fa|th examp|es
Iu||y d|sc|os|ng mater|a| facts
Substant|a||y perform|ng w|thout know|ng|y dev|at|ng from
from spec|f|cat|ons
kefra|n|ng from abuse of barga|n|ng power
Act|ng cooperat|ve|y
Act|ng d|||gent|y
Act|ng w|th some reason
Interpret|ng contract |anguage fa|r|y
Accept|ng adequate assurances
8reach Nonperformance of a duty that |s due
An ob||gat|on |s not due |f nonperformance |s [ust|f|ed
If there nAS been substant|a| performance then any other breach
a Ak1IAL breach
If there has NC1 been substant|a| performance then any breach w|||
MA1LkIAL breach
r|or art|a| 8reach
|s NC1 [ust|f|cat|on for nonperformance
ou can get expectat|on damages for the damages caused by the
part|a| breach but you cannot stop perform|ng a|together
If a party fa||s to comp|y w|th the terms of the contract but the|r
transgress|on was UNIN1LN1ICNAL and the dev|at|on from the
agreed upon terms |s tr|v|a| (nom|na| or noth|ng) then the party |s
on|y ||ab|e for money that wou|d a||ow the owner to comp|ete the
pro[ect the way he des|gned |t to be
If the cost of comp|et|on |s gross|y and unfa|r|y out of
proport|on to the good to be atta|ned the remedy w||| be
the d|fference between the des|gned good and the actua|
good rather than a fu|| breach of contract
Dependent rom|ses rom|ses that are so p|a|n|y dependant on the
performance of the other party that they themse|ves must be treated
cond|t|ons
Independent rom|ses prom|ses that are so p|a|n|y |ndependent
they can never by fa|r construct|on be cond|t|ons of one another
r|or Mater|a| 8reach
1est to determ|ne |f a breach |s mater|a|
1he extent to wh|ch the |n[ured party w||| be depr|ved of the
the benef|t he reasonab|y expected
1he extent to wh|ch the |n[ured party can be adequate|y
compensated for the part of the benef|t that he w||| be
depr|ved of
1he extent to wh|ch the party fa|||ng to perform or offer|ng
to perform w||| suffer forfe|ture
1he ||ke||hood that the party fa|||ng to perform or to offer to
to perform w||| cure h|s remed|es tak|ng account of a|| the
c|rcumstances |nc|ud|ng any reasonab|e assurances
1he extent to wh|ch the behav|or of the party fa|||ng to
perform or to offer to perform comports w|th standards of
good fa|th and fa|r dea||ng
kemed|es
Suspend performance
r|or 1ota| 8reach
1est to transfer |t from mater|a| tota| breach
Mater|a||ty factors LUS
1he extent to wh|ch |t reasonab|y appears to the |n[ured
party that de|ay may prevent or h|nder h|m |n mak|ng
reasonab|e subst|tute arrangements (how |t may |n[ure h|s
future act|ons)
1he extent to wh|ch the agreement prov|des for
performance w|thout de|ay but a mater|a| fa||ure to perform
perform or to offer to perform on a stated day does not |tse|f
|tse|f d|scharge the other part|es rema|n|ng dut|es un|ess the
the c|rcumstances |nc|ud|ng |anguage of the agreement
|nd|cate that performance or an offer to perform by that day
day |s |mportant
1lMlnC lS Cl 1PL LSSLnCL CLAuSL Lhere are
speclflc daLes LhaL show how a maLerlal breach may
noL dlsrupL Lhe conLracL buL Llmlng ls necessary
kemed|es
Stop performance
1erm|nate the contract
Seek a new contract
keasonab|e Grounds for Insecur|ty
Grounds for reasonab|e |nsecur|ty must ar|se from act|ons after the
the format|on of the contract not from anyth|ng known when the
contract was formed
keasonab|eness |s def|ned by |ndustry standards not |ega| standard
standard
Demand for adequate assurance must be c|ear an unequ|voca|
Adequate assurance must then be g|ven |n a reasonab|e amount of
of t|me (30 days)
What const|tutes adequate assurance |s determ|ned by commerc|a|
commerc|a| reasonab|eness and factua| cond|t|ons
kemed|es
Demand for adequate assurance of performance (demands
must be reasonab|e)
Can suspend performance unt|| adequate assurance |s g|ven
g|ven
Cnce adequaLe assurance ls glven Lhe parLy musL
resume performance or rlsk breachlng Lhe conLracL
If adequate assurance |s not g|ven can treat fa||ed
assurance as an ant|c|patory repud|at|on
Ant|c|patory kepud|at|on
A c|ear man|festat|on of |ntent not to perform the contract on the
date of performance It has to be stated |n c|ear unequ|voca| and
def|n|te |anguage A comment of uncerta|nty or of an attempt to
renegot|ate w||| not suff|ce
If someone states that they refuse to perform except under new
cond|t|ons then |t w||| be treated as a repud|at|on
1he repud|at|ng party can retract repud|at|on un|ess the |n[ured
party
Conveys acceptance of repud|at|on to the repud|at|ng party
party
(or) Mater|a||y changes h|s pos|t|on |n re||ance on
repud|at|on (|e enters |nto a contract w|th another ent|ty)
If the repud|at|ng party retracts the repud|at|on before e|ther of
the two occurrences then the |n[ured past has no cause of act|on
aga|nst the repud|at|ng party
kemed|es
Stop performance
1erm|nate contract (through acceptance of the repud|at|on
as stated above) th|s w||| then be treated as a tota| breach
NonCccurrence of an Lxpress Cond|t|on
Lxpress cond|t|ons MUS1 be ||tera||y performed Substant|a|
performance |s not suff|c|ent
Un||ke |mp||ed]construct|ve cond|t|ons wh|ch are |mp||ed
by |aw and f|ex|b|e to wh|ch substant|a| performance |s
somet|mes suff|c|ent
Cond|t|on must be performed before performance |s due on the
other s|de
Doubtfu| |anguage w||| be |nterpreted by the courts as a
construct|ve cond|t|on
Cra| Cond|t|on recedent a term |s d|scussed or ta|ked about
extens|ve|y before negot|at|ons as be|ng necessary for the k to
move forward but was never actua||y put |nto the k In those
s|tuat|ons you can use aro| Lv|dence to get the prov|s|on put |nto
the k
Lxpress cond|t|on excuses
Wa|ver an |ntent|ona| re||nqu|shment of a known r|ght It
|s effect|ve |f |t |s wa|ved by the party who benef|ts from the
cond|t|on
ls effecLlve only lf Lhe condlLlon walved ls noL a
maLerlal parL of Lhe performance Lhe obllgor was
enLlLled Lo recelve or a maLerlal parL of Lhe rlsk
assumed
lL becomes blndlng Lhrough conslderaLlon
Lstoppe| An |ntent|ona| re||nqu|shment of a known r|ght
and the other party re||es on |t to the|r detr|ment
lL becomes blndlng once Lhere ls rellance
revent|on 1he cond|t|onbenef|tt|ng party comm|ts an
act|on to prevent the express cond|t|on from occurr|ng
Cne of Lhe flrsL Lhlng ln analyzlng lL ls lf Lhe parLy has
has conLrol over Lhe condlLlon from occurrlng 1hen
see lf LhaL parLy acLually Lakes acLlon agalnsL Lhe
condlLlon
1he parLy does noL have a duLy Lo make sure Lhe
condlLlon arlses buL cannoL purposely Lake acLlon
agalnsL Lhe condlLlon (bad falLh)
lf Lhe condlLlon proLecLs only one parLy Lhen Lhe
parLy who lL proLecLs cannoL brlng Lhls up as an excuse
excuse
Avo|dance of Iorfe|ture If |t ends up be|ng a huge
forfe|ture because of a sma|| express cond|t|on fa|||ng to
occur then the nonoccurrence w||| be excused
Lxpress condlLlons musL be clear and unequlvocal
Cbllgee arLy who musL perform Lhe express
condlLlon
Cbllgor arLy who ls walLlng on Lhe evenL Lo occur
before performlng Lhelr duLles
2 maln elemenLs
(1) CondlLlon lLself was nonmaLerlal
a ln[ury Lo Lhe vlcLlm
b AblllLy Lo compensaLe
c AmounL of forfelLure
d Llkellhood of a cure
e Was Lhe nonoccurrence ln good falLh
falLh
(2) ls Lhere an exlsLence of forfelLure?
1he blgger Lhe forfelLure Lhe more llkely lL wlll be
nonmaLerlal
kemed|es
Contract becomes vo|d because performance |s dependant
on occurrence of a cond|t|on
Defenses
1he |aw presupposes certa|n th|ngs about part|es' psycho|og|ca|
capac|t|es |n a contract
Understand the nature]consequences of cho|ce and know what |s
|n your best |nterest (or at |east have the capac|ty to)
Conform your act|ons to those [udgments
Substant|ve Defenses Concerned that the mutua| benef|t |s sp||t up
fa|r|y
Defenses can be ra|sed |n two forms
Sh|e|d as a defense to protect you from |awsu|ts
Sword as an aff|rmat|ve act|on to resc|nd a contract
kemed|es 1ry to put both part|es back |n the p|ace they were
the contract (form of rest|tut|on)
M|nor|ty ku|e
A contract |s vo|dab|e but not automat|ca||y vo|ded
M|nor|ty party can d|saff|rm a contract anyt|me dur|ng m|nor|ty and
and a reasonab|e t|me after m|nor|ty status ends
Un|ess aff|rmed w|th capac|ty through express act|ons or
om|ss|on (reach 18+ and fa|| to take act|on |n reasonab|e
amount of t|me)
If the m|nor|ty has a guard|an who aff|rms the contract then
then |t becomes aff|rmed
If the contract |s a contract of necess|ty then |t |s a va||d
contract
Lven |f the m|nor|ty cannot restore fu|| cons|derat|on to the other
party they can vo|d the contract
8enef|t ku|e If there has been no overreach|ng AND kfa|r |n
good fa|th then the other party can deduct for use]deprec|at|on of
merchand|se
If there nAS been overreach|ng unfa|r terms or |ack of good fa|th
then the contract |s |nstant|y vo|dab|e w|thout any recourse due to
the oppos|ng party
Cther party can a|so sue for fraud (tort c|a|m) |f the ch||d
m|srepresented h|s age
Menta| Incapac|ty ku|e
arty can d|saff|rm contract for |ack of menta| capac|ty (|s not
automat|ca||y vo|ded but rather vo|dab|e)
Was the person menta||y |ncapab|e at the t|me of the
contract?
Cogn|t|ve test If the person |s ab|e to understand the terms of the
the contract and understand the|r persona| needs
Vo||t|ona| test If the person can act |n a reasonab|e manner (|n
||ght of transact|on) to enter |nto the contract and the other party
has know|edge of |t (actua| or construct|ve)
Someone w|th CCD buy|ng count|ess amounts of handbags
even though they c|ear|y do not need them
Contract can be aff|rmed w|th capac|ty
Menta||y |ncapac|tated person MUS1 be ab|e to restore fu||
cons|derat|on |n order for the contract to be vo|dab|e
If there was overreach|ng unfa|r terms or bad fa|th there
does not need to be fu|| restorat|on |n order for the contract
to be vo|dab|e AND the other party cannot f||e a cause of
act|ons for a setoff (deduct|ons)
Duress
S|mp|e def|n|t|on Any wrongfu| threat of one person by words or
or other conduct that |nduces another to enter |nto a transact|on
under the |nf|uence of such fears ass prec|udes h|m from exerc|s|ng
exerc|s|ng free w||| and [udgment |f the threat was |ntended or
shou|d reasonab|y have been expected to operate as |nducement
In Duress you have your fu|| capac|t|es of barga|n|ng but another
person has changed the barga|n|ng s|tuat|on that forces a person to
to act |n a way that |s d|fferent from the way they wou|d w|th free
w||| and c|ear [udgment
S|mp|e Ske|eton
(1) Wrongfu| threat
1hreaL Lo llfe llmb
1hreaL Lo anyLhlng LorLuous or crlmlnal
(2) No reasonab|e a|ternat|ve
(3) Actua||y |nduces the act|ons of the threatened party
Ior S|mp|e Duress the contract |s automat|ca||y vo|d and cannot be
be aff|rmed |ater on
Lconom|c Duress Ske|eton
(1) eop|e enter |nto the barga|n |n a vo|untary manner
(2) Cne party takes advantage of econom|c duress wh||e
a|ready |n the contract
a 1ry Lo modlfy Lhe conLracL when dlre sLralghLs
come lnLo play
b 8reaches Lhe duLy of good falLh and falr deallng
(3) No reasonab|e a|ternat|ve
(4) Actua||y |nduces the party to s|gn the new agreement
a Cnly has Lo play a slgnlflcanL parL
(S) 1he wrongfu| party br|ngs about the c|rcumstances that
cause the s|tuat|on the other party |s |n
Duress econom|c or otherw|se w||| ALWAS be |n bad fa|th and
therefore a party w||| NC1 have to restore fu|| cons|derat|on |n order
order to vo|d the contract
1he duress|nduc|ng party can a|so NC1 obta|n a setoff because
the act|on was |n bad fa|th
Undue Inf|uence
Undue |nf|uence dea|s more w|th a person's capac|ty to dea| w|th a
a contract
1he |nf|uence |tse|f does not have to be wrongfu|]cr|m|na|
At the end of the day the party |s not exerc|s|ng the|r fu||
capac|t|es |n mak|ng a dec|s|on
CvL8CCMlnC 1PL WlLL Wl1PCu1 CCnvlnClnC 1PL
1PL !uuCMLn1
L|ements of Undue Inf|uence
1 A |essened capac|ty of the ob[ect to make a free contract
2 App||cat|on of excess|ve strength by a dom|nant actor
aga|nst a serv|ent actor
A party can be |ed but NC1 dr|ven n|s acts must be the offspr|ng
of h|s own vo||t|on and not the record of someone e|se's
Whether from weakness on one s|de or strength on the other or a
comb|nat|on of both undue |nf|uence occurs whenever there resu|ts
resu|ts "that k|nd of |nf|uence or supremacy of one m|nd over
another by wh|ch that other |s prevented from act|ng accord|ng to
h|s own w|sh or [udgment and whereby the w||| of the person |s
overborne and he |s |nduced to do or forbear to do an act he wou|d
not do |f |eft free|y
Cverpersuas|on genera||y |nvo|ves the fo||ow|ng e|ements
D|scuss|on of a transact|on at an unusua| or |nappropr|ate
t|me
Consummat|on of the transact|on |n an unusua| p|ace
Ins|stent demand that the bus|ness be f|n|shed at once
Lxtreme emphas|s on untoward consequences of de|ay
1he use of mu|t|p|e persuaders by the dom|nant s|de aga|nst
aga|nst a s|ng|e serv|ent party
Absence of th|rdparty adv|sors to the serv|ent party
Statements that there |s no t|me to consu|t f|nanc|a|
adv|sors or attorneys
U|t|mate|y |t comes down to one quest|on
D|d one party overpower one person's w||| w|thout
overcom|ng the|r [udgment?
Can UI contracts be aff|rmed |ater? LS
Can UI contracts be aff|rmed because of necess|ty? LS
Undue Inf|uence can come |n 2 forms (bad fa|th or good fa|th w|th a
a weak m|nd) 1herefore the party must be ab|e to restore fu||
cons|derat|on |n order to vo|d the contract UNLLSS there |s bad
fa|th to wh|ch the party |s not requ|red to restore fu|| cons|derat|on
cons|derat|on and there wou|d be no poss|b|||ty of a setoff
8as|ca||y the same ru|e as menta| |ncapac|ty
M|srepresentat|on
L|ements of M|srepresentat|on for CCN1kAC1 |aw
1 Aff|rmat|ve statement of fact
2 Statements must be fa|se
3 Ia|se statements were mater|a| to enter |nto the contract
contract
4 1here was actua| reasonab|e re||ance
S ou entered |nto the contract
ALL four e|ements must be present |n order for a contract to
to be vo|ded
1he supp|ementary e|ements are not necessary to vo|d a
contract
1 know|edge that the statements were fa|se
2 Intent to dece|ve and defraud
3 Damages
A statement of op|n|on cannot amount to m|srepresentat|on of fact
fact
LkCL1ICNS to the statement of op|n|on |mmun|ty
1 MlsrepresenLaLlon of your sLaLe of mlnd (lylng abouL
abouL your oplnlon)
2 lf Lhe person has a flduclary (speclal) relaLlonshlp lL
lL ls acLlonable Lo rely on a LrusLed oplnlon
3 1he person ls an experL on maLLers covered by Lhe
oplnlon
4 8enders oplnlon Lo a person who because of age or
or oLher facLors ls parLlcularly suscepLlble Lo
mlsrepresenLaLlon
NonD|sc|osure
Where a se||er knows of facts mater|a||y affect|ng the va|ue or
des|rab|||ty of the property wh|ch are known or access|b|e on|y to
h|m (and not the buyer) and knows that such facts are not known
or w|th|n d|||gent attent|on and observat|on of the buyer the se||er
|s under a duty to d|sc|ose these facts to the buyer
1he 8uyer |s not forced to d|sc|ose any |nformat|on to the se||er
1h|s can be used as a sword or a sh|e|d
Nond|sc|osure Ske|eton
1 1here was no representat|on
2 Cf someth|ng that |s true
3 1hat th|ng |s mater|a|
4 1here was reasonab|e re||ance on the om|ss|on of
|nformat|on
S 1he part|es then entered |nto a contract
Statute of Irauds
Certa|n types of contracts that must be ev|denced |n some form of
wr|t|ng so as to be va||d
1 Does |t f|t the cr|ter|a for a contract fa|| w|th|n the Statute of
Irauds?
Contracts for a sa|e of an |nterest |n |and
Cne year prov|s|on |f the contract cannot be LkICkMLD
LkICkMLD w|th|n one year |t fa||s under the Statute of
Irauds
1 lf lL hypothet|ca||y can be performed ln one year
noL maLLer Lhe chance lf lL acLually happenlng Lhen lL
wlll noL be under Lhe SLaLue of lrauds
2 LIIL1IML conLracLs can be performed wlLhln one
year and Lherefore do noL fall under Lhe sLaLuLe of
frauds
3 lf lL ls noL lnLended Lo be a llfeLlme conLracL Lhen
Lhe facL LhaL Lhe conLracL ls able Lo be LermlnaLed
wlLhln one year (elLher by repudlaLlon or deaLh) has no
no bearlng on lf lL ls under Lhe SLaLuLe of lrauds
A contract made upon the cons|derat|on of marr|age
le lf you geL marrled l wlll glve you"
Applles Lo dowryllke provlslons raLher Lhan beLween
beLween Lhe Lwo people acLually geLLlng marrled
Surteysh|p prov|s|on Any contract to answer for the debt
of another
LxcepLlons LhaL are noL sub[ecL Lo Lhe SLaLuLe of
lrauds
1he promlse ls made Lo Lhe lndebLed person
1he promlse was made for your own economlc
economlc advanLage
1he promlse LhaL dlscharges Lhe lndebLed
person from responslblllLles
Lxamples where lL would fall under Lhe SLaLuLe of
lrauds
romlse ls made Lo Lhe credlLor
romlse was noL made for personal economlc
economlc advanLage
romlse uCLS nC1 releases Lhe lndebLed parLy
parLy from responslblllLles
LxecutorAdm|n|strator prov|s|on
1 When an execuLor makes a promlse Lo pay Lhe
debL of Lhe esLaLe/guardlan/ecL lL musL be ln wrlLlng
wrlLlng
2 Sp as Lo blnd Lhe execuLor as an lndlvldual noL Lhe
Lhe esLaLe lLself
A promlse blndlng Lhe esLaLe would noL be
under Lhe SLaLuLe of lrauds
UCC rov|s|on
ln any uCC LransacLlon any sale of goods ln excess
of $300 MuS1 be ln wrlLlng
2 Does the contract meet the Statute of Irauds requ|rements?
Is |t |n wr|t|ng? (Memorandum requ|rement 131)
1 8easonably ldenLlfles Lhe sub[ecL maLLer of Lhe
conLracL
2 ls sufflclenL Lo lndlcaLe LhaL a conLracL wlLh respecL
respecL LhereLo has been made beLween Lhe parLles or
or offered by Lhe slgner Lo Lhe oLher parLy
3 SLaLes wlLh reasonable cerLalnLy Lhe essenLlal
Lerms of Lhe unperformed promlses ln Lhe conLracL
uCC LxcepLlon
uCC follows all Lhe rules of Lhe
memorandum requlremenL excepL for
provlslon 3 all LhaL ls needed ls Lhe quanLlLy of
of Lhe goods 1he resL can be fllled ln by parol
evldence
Is |t s|gned (S|gnature requ|rement 134)
1he slgnaLure Lo a memorandum may be any symbol
symbol made or adopLed wlLh an lnLenLlon acLual or
apparenL Lo auLhenLlcaLe Lhe wrlLlng as LhaL of Lhe
slgner
3 LkCL1ICN to the Statute of Irauds?
Sect|on 139 (bas|ca||y rom|ssory Lstoppe|) A prom|se
wh|ch the prom|sor shou|d be reasonab|y expected to |nduce
|nduce act|on or forbearance on the part of the prom|see or
a th|rd person and does |nduce the act|on or forbearance |s
now enforceab|e notw|thstand|ng the Statute of Irauds |f
|n[ust|ce can be avo|ded on|y by enforcement of the prom|se
prom|se
ou geL rellance damages
L|nk|ng Doctr|ne 1hey re|ate documents to each other
1he documents reference the same transact|on
1he document s|gned by the charged party creates a
contractua| re|at|onsh|p
1he uns|gned document references the s|gned document
Unconsc|onab|||ty
o||ces contracts for some k|nd of fa|rness
I|nds a ba|ance between "deferr|ng to vo|untary assent" and
"po||c|ng barga|ns for fa|rness
1r|es to f|nd a ba|ance so there |s equa||ty |n the d|str|but|on of
benef|ts that ar|se due to the contract
As a ru|e we norma||y defer to vo|untary assent but there are
those except|ons where the c|rcumstances make |t so that the
courts can protect for fa|rness
1he test for unconsc|onab|||ty |nvo|ves two factors both of wh|ch
must be present for the unconsc|onab|||ty defense to work
rocedura| Unconsc|onab|||ty e|ther the |ack of
mean|ngfu| cho|ce by one party of some defect |n the
barga|n|ng process (such as quas|fraud or quas|duress)
WheLher Lhe person undersLood Lhe Lerms or had Lhe
Lhe opporLunlLy Lo undersLand Lhe Lerms
WheLher Lhe person could have changed/negoLlaLed
changed/negoLlaLed Lerms
WheLher Lhey could have consulLed wlLh an educaLed
educaLed auLhorlLy
Covers a loL of procedural defenses (duress menLal
lncapaclLy mlsrepresenLaLlon ecL)
ou have Lhls defense as well as Lhe
procedural defense
rocedural unconsclonablllLy ls a broader
lnLerpreLaLlon (lower sLandard) Lhan slmple
procedural defenses
If there was a way a party cou|d have taken
advantage of the other party
Substant|ve unconsc|onab|||ty the fa|rness of the terms |n
|n the resu|t|ng barga|n (are skewed s|gn|f|cant|y)
Pow unfalr are Lhe Lerms Lo one of Lhe parLles?
DID the party take advantage of the d|sadvantaged
party?
CCUk1S ALLCW A SLIDING SCALL (|f you have a |ot of one
you don't need to prove as much as the other)
ub||c o||cy
1here are statutes that say contracts are unenforceab|e contracts
that pub||c po||cy |mp||ed|y proh|b|ts and contracts that contract
|aw spec|f|ca||y proh|b|ts
ou must ba|ance the |nterest of the party try|ng to enforce the
contract as we|| as aga|nst the |nterest of the pub||c
kestatement 178 contracts aga|nst pub||c po||cy are unenforceab|e
unenforceab|e |f
1 Leg|s|at|on prov|des that |t |s unenforceab|e
2 ub||c po||cy aga|nst enforcement |s |arger than po||cy
favor|ng enforcement (ba|anc|ng test)
ln welghlng lC8 enforcemenL of a Lerm we look aL
arLles [usLlfled expecLaLlons
Any forfelLure LhaL would resulL ln Lhe
enforcemenL of a parLlcular Lerm
Any speclal publlc lnLeresL ln Lhe enforcemenL
enforcemenL of a Lerm
ln welghlng publlc pollcy ACAlnS1 enforcemenL of a
a Lerm we look aL
1he sLrengLh of LhaL pollcy as manlfesLed by
leglslaLlon or [udlclal declslons
1he llkellhood LhaL refusal Lo enforce LhaL Lerm
Lerm wlll furLher LhaL pollcy
1he serlousness of any mlsconducL lnvolved
and Lhe exLenL Lo whlch lL ls dellberaLe
1he dlrecLness of Lhe connecLlon beLween Lhe
Lhe mlsconducL and Lhe Lerm
3 Contracts that are proh|b|ted |n contract |aw
179 resLralnL on Lrade ls prohlblLed
When Lhe resLralnL ls greaLer Lhan necessary
Lo proLecL Lhe promlsee's lnLeresL
1he promlsee's need musL noL be ouLwelghed
ouLwelghed by Lhe hardshlp endured by Lhe
promlsor and Lhe ln[ury Lo Lhe publlc
LxcepLlons Lo Lhe resLralnL on Lrade prohlblLlon (Lhe
(Lhe excepLlons S1lLL musL pass Lhe crlLerla above)
above)
1he sale of a buslness
1he employeremployee relaLlonshlp
A promlse by a parLner noL Lo compeLe
If a restr|ct|on IS determ|ned to be too broad the
reso|ut|ons are
1 CompleLely vold Lhe enLlre resLrlcLlon covenanL
1hrow ouL Lhe enLlre covenanL because some
parLs may be agalnsL publlc pollcy
2 Pave Lhe courL drafL a whole new provlslon
1hrough ouL Lhe prlor covenanL and have Lhe
courL creaLe a new covenanL LhaL mlrrors Lhe
prevlous covenanL buL does noL vold publlc
pollcy
3 8lue encll 8ule
Cross ouL Lhe provlslons LhaL Lhe courL Lakes
lssue wlLh s belng agalnsL publlc pollcy leave
whaLever ls lefL
lf whaLever ls lefL cannoL form a cogenL
covenanL Lhen Lhe enLlre covenanL becomes
vold
Mod|f|ed Contracts
If a k |s mod|f|ed the party cannot c|a|m a breach |f they accept the
breach as a part of the new k mod|f|cat|on
St||| the party cou|d c|a|m that the mod|f|ed k was the resu|t of
|nf|uence duress ect and cou|d be vo|ded
kemed|es
Second 8east rom|ssory Lstoppe|
Damages ke||ance Damages amount needed to compensate for
caused through reasonab|e re||ance on the prom|se
a|d for what you spent no prof|t
1ends to be sma||er than expectat|on damages
Stages of rom|ssory Lstoppe|
rom|se (can be ora| or wr|tten)
D|d the prom|se |nduce an act|on or forbearance
keasonab|e re||ance on the prom|se
Cn|y way to avo|d [ust|ce |s the enforcement of the prom|se
Somet|mes courts are re|uctant to enforce prom|ssory estoppe|
aga|nst fam||y members
rom|se
1he prom|se |s b|nd|ng |f the prom|sor shou|d reasonab|y expect to
to |nduce act|on or forbearance of a def|n|te or substant|a| character
character on the part of the prom|see
If the prom|see has a reasonab|e expectat|on to re|y on the prom|se
prom|se and does so
Statement of future |ntent v offer]prom|se
An offer comes together through mutua| assent wh||e SII |s
|s one party's own thoughts
A prom|se |s a man|festat|on of a comm|tment to do
someth|ng so as to make another person re|y on those
act|ons SII |s a factua| statement
When on know|ng|y undertakes the ob||gat|ons of a prom|se
vo|untar||y and does so for a s|gn|f|cant per|od of t|me so that the
prom|se has been re||ed upon even |f there has been not ora| or
wr|tten statements stat|ng as much the prom|se becomes b|nd|ng
Jriqht v Newmon
Conduct can estab||sh a prom|se [ust as suff|c|ent|y as ora| or
or verba| statements
keasonab|e re||ance
keasonab|e re||ance ex|sts when the prom|se |nduces the actor to
VCLUN1AkIL perform an act or g|ve up a r|ght that he otherw|se
wou|d not
keasonab|e re||ance cannot be nu|||f|ed [ust because the
actor takes add|t|ona| steps to remedy h|s pred|cament
through other means
If a party makes a prom|se to another party to take on an
ob||gat|on and does noth|ng to suggest that the ob||gat|on the party
party has taken on |n a prom|se |s term|nated then the prom|sor |s
st||| ||ab|e under prom|ssory estoppe| unt|| they renounce the|r
ob||gat|on 5hoemoker v commonweo/th 8onk
Char|tab|e rescr|pt|ons
Lxpectat|on damages are g|ven for char|tab|e subscr|pt|ons
It |s an ora| or wr|tten prom|se to do certa|n acts or to g|ve rea| or
persona| property to a char|ty or for a char|tab|e purpose
Char|tab|e prescr|pt|ons can be b|nd|ng |f there |s re||ance or
cons|derat|on
1h|rd 8east kest|tut|on]Un[ust Lnr|chment
Character|st|cs
Conferra| of a mater|a| benef|t
In c|rcumstances |n wh|ch retent|on may be un[ust
Damages kest|tut|on Damages
In rest|tut|on cases the remedy |s fa|r market va|ue for one's
serv|ces or return benef|t
Lnough to compensate for the mater|a| benef|t conferred
It |s the market exchange method
When a person confers a mater|a| benef|t on a person w|th a g|ft
w||| be no |ega| rest|tut|on
e|o Iactors (cr|ter|a for rest|tut|on |n the case where a person |s
w|thout the know|edge or consent of the grantee)
1 Grantor acted w|th the |ntent to charge thereof
1h|s more spec|f|ca||y means that |f the grant |s someth|ng
the grantor norma||y does profess|ona||y |t |s not cons|dered
cons|dered gratu|tous and therefore rest|tut|on |s poss|b|e
If |t |s not someth|ng that a person wou|d norma||y do
w|thout the |dea of rece|v|ng rest|tut|on (|e someone's
grandmother)
2 1he th|ngs or serv|ces were necessary to prevent the other from
from suffer|ng ser|ous bod||y harm or pa|n
3 1he person supp|y|ng the grantee has no reason to know that
the grantee wou|d not consent to rece|v|ng the benef|t |f menta||y
competent
1he grantee must re[ect the benef|t |f poss|b|e |f they |ntend
|ntend to c|a|m that they wou|d not have consented to
rece|ve the benef|t Cn|y when |t |s |mposs|b|e to return the
benef|t can the grantee keep the benef|t and st||| c|a|m that
the grantor was an off|c|ous |ntermedd|er
4 It was |mposs|b|e for the grantee to g|ve consent or because of
extreme youth or menta| |mpa|rment the grantee's consent wou|d
have been |mmater|a|
*If any of these cr|ter|a were unfu|f|||ed then the person wou|d
e|ther be seen as a vo|unteer or an off|c|ous |ntermedd|er and
wou|d not be ab|e to seek rest|tut|on
Mater|a| 8enef|t ku|e
1 1he prom|sor was un[ust|y enr|ched by a benef|t prev|ous|y
rece|ved from the prom|see
2 1here |s an |ntent to charge
3 1he prom|sor subsequent|y makes a prom|se |n recogn|t|on of the
the benef|t
4 1he prom|se |s NC1 b|nd|ng
| If the prom|see conveyed the benef|t as a g|ft or for others
reasons for wh|ch the prom|sor has not been un[ust|y
enr|ched
|| 1o the extent that the va|ue |s d|sproport|onate to the
benef|t
8as|ca||y acknow|edg|ng a past mater|a| benef|t conferred upon you
you and prom|s|ng rest|tut|on thereby s|gna||ng that you wou|d
have rece|ved the benef|t |f you had known of |t at the t|me
1he court w||| a||ow the prom|se to be the gauge of the fa|r market
va|ue un|ess the prom|se |s way out of the norma| IMV to wh|ch
the courts wou|d revamp the prom|se to ref|ect the IMV
So Ca||ed Mora| Cb||gat|on Doctr|ne
1here |s a contract |n p|ace
A party the |ega||y vo|ds the contract
1he party than wa|ves h|s vo|d of the contract by prom|s|ng the
benef|t after the vo|dsh|p
Cther names for kest|tut|on
uas| Contract
Not a rea| contract based upon mutua| assent but rather
through |mp||ed assent
Contract |mp||ed |n |aw
Lega| f|ct|on
Un[ust enr|chment
A person who rece|ves the benef|t |s gett|ng an unwarranted
unwarranted prof|t
uantum Meru|t
Amount you deserve for your serv|ces when the conferred
benef|t was a serv|ce
uantum Va|ebat
Amount you deserve for the goods prov|ded when you
conferred a phys|ca| good
Mater|a| 8enef|t ru|e
Cn|y |n certa|n c|rcumstances
Soca||ed Mora| Cb||gat|on doctr|ne
More of a 1
st
beast th|ng
Construct|ve contract
Doesn't ar|se from the part|es assent but rather ar|ses |n
|aw
107 Lffect of Lx|stence of 8arga|n upon k|ght of kest|tut|on (pg
If you have a contract you cannot seek for more than you
barga|ned for
If you w|n on breach of contract you cannot seek rest|tut|on
rest|tut|on
If a contract |s vo|ded because of fraud m|stake duress undue
|nf|uence or |||ega||ty then a person can seek rest|tut|on damages
kest|tut|on can a|so occur when mater|a| benef|t |s conferred v|a an
|nva||d contract
kest|tut|on from a th|rd party
If you are seek|ng rest|tut|on from a party you conveyed a mater|a|
mater|a| benef|t to but dea|t w|th]through an |ntermed|ate party
these are the cr|ter|a
1 |a|nt|ff conferred benef|t on the defendant
2 1he defendant has know|edge of the benef|t
3 1he defendant accepted or reta|ned the benef|t
4 1he c|rcumstances are such that |t wou|d be |nequ|tab|e
for the defendant to reta|n the benef|t w|thout pay|ng fa|r
va|ue for |t
***A|so the party seek|ng rest|tut|on must have exhausted
a|| of the|r opt|ons aga|nst the |ntermed|ary party and
rema|ned unpa|d
ALSC the party rece|v|ng the benef|t must not have a|ready
a|ready compensated someone for the mater|a| benef|t
Longterm re|at|onsh|ps that aren't c|ass|f|ed as marr|ages can use
rest|tut|on to equa||y d|v|de up the property when |t wou|d be un[ust
one party to keep property acqu|red through the efforts of both
Mora| doctr|nes are not supportab|e If one person confers a
benef|t upon another person then they can on|y seek rest|tut|on
that party 1hey cannot seek rest|tut|on from peop|e who do not have
|ega| connect|on to the party no matter how much the th|rd party
be mora||y cu|pab|e
kest|tut|on damages can ex|st after the prom|sor |s dead as |ong as
prom|sor's estate can prov|de them and they are requ|red by the
prom|see
If the rest|tut|on damages dea| w|th a prom|se the |aw w||| defer to
prom|se un|ess the prom|se |s way out of ||ne w|th the fa|r market
If that |s the case the damages w||| ref|ect fa|r market va|ue